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VIX's New "Normal"

At one point today, the VIX fell 7% and touched its post Lehman-low. This despite what had been some very bearish posturing from market participants just last week. Case in point, heavy upside call buying on VIX options in the July and August expiry at the 50-strike.

"The call buyers seem to be protective bets against a market downturn and not a pure speculative play," said Brian Stutland, President of Stutland equities and VIX merchant extraordinaire.

The move in the VIX was roundly welcomed by some traders as a sign that perhaps the worst is behind us.

But before we pop Veuve Cliquot, it is worth noting that even with the VIX touching a 9-month low, it remains historically elevated at 27. It's roughly at the same level when Bear Stearns collapsed - not exactly a calm moment for the markets.

Questions, comments send them to us at: optionsaction@cnbc.com

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    Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

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